It is important that you carry aircraft insurance physical damage coverage for your plane even if state and federal regulations don’t demand it. Covering damage yourself or completely replacing your plane could be expensive enough to keep you on the ground.
What Is Physical Damage Coverage?
Physical damage coverage, also called hull coverage, protects you in case of damage to the plane itself. This is an optional coverage on an aircraft insurance policy, with the base coverage always being liability coverage, that protects the aircraft owner from bodily injury or property damage, caused by the aircraft.
Your physical damage coverage includes damage to parts of your plane such as the hull, avionics, propellor, and engine. If you upgrade any of these parts of the plane, you should contact your insurance broker to see you should increase your hull coverage to account for this new equipment.
Depending on the type of plane you fly, there may be additional factors to consider.
For example, physical damage coverage includes damage to the pontoons if you have a seaplane. The amount you can recover is written into your policy. If you have $200,000 worth of coverage on your seaplane, you might have agreed with the insurance company, that $20,000 was for the pontoons and the other $180,000 for the rest of the plane.
Determining the Physical Damage Coverage You Need
It is very important that you come up with the proper amount of insurance you need, as both under and over-insuring your plane can be a problem. Over insuring your plane means you will likely pay more in premiums than you have to.
Underinsuring could mean that you end up without the means to make your plane air-worthy, or to replace it in the event of a complete loss.
Keep in mind that you and your insurance company agree on the value of your plane when you start the policy. Unlike auto insurance, aviation insurance is based on agreed value, which means the aircraft is insured up to the full amount written on the insurance policy, without depreciation.
What Doesn’t It Cover?
Your physical damage coverage protects the plane itself, not damage done by your plane. It also does not covermechanical or electrical breakdowns or general wear and tear.
You should talk to your broker and read your policy closely to see if some damage to your airplane would be covered as a result of a breakdown. For example, if a failing part on your plane causes you to make an emergency landing, the part wouldn’t be covered but the damage that resulted from that landing might be.
Your policy will also exclude extraordinary events, such as damage from terrorist acts, hijacking, or the cost of your plane if it is confiscated by the government.
Types of Physical Damage Coverage
How much you pay for your aircraft insurance physical damage coverage depends on whether you choose one or several options. Talk to your broker about which options are the best fit given how you use your plane and what exclusions might apply.
On the Ground Not in Motion
This type of damage coverage protects you when your aircraft is on the ground and not moving at all.
Not In Flight
Not In Flight damage insurance is an extension of ground insurance with additional coverage if your plane is on the ground but moving.
Ground and Flight
Ground and Flight is the most comprehensive damage coverage. It covers you whether your plane is in the air or on the ground, barring any exclusions that are written into your policy.
Physical Damage Coverage Deductibles
When you are considering damage coverage for your aircraft, be sure to check the amount of the deductible written into the offered policy before signing on the dotted line. The deductible is the amount you pay to cover the damage, and it varies by insurance agency.
The coverage for your plane is different than for a car, as you have already agreed with the insurance company ahead of time on how much the plane is worth for the duration of your policy. If there is $20,000 damage and you have a $5,000 deductible, you pay the $5,000 and your insurance company pays the other $15,000.
Your insurance company won’t pay for repairing damages above the agreed-upon worth of your plane at the inception of your policy. If it would cost more to fix it than it is worth, it will be considered a total loss and you will get the full amount of your damage policy minus your deductible.
Don’t Undermine Your Coverage
When you make an agreement with an insurance company, you make promises about yourself and your plane. If you break these promises, the insurance company may not pay for your damages. There are several situations in which that might occur, including:
- You let someone not listed on the insurance policy or who doesn’t meet the specifications laid out in the policy pilot the plane
- You no longer have an airworthiness certificate
- You use the plane in a manner not covered by the policy, for example using it as an air taxi instead of just for pleasure
Review your policy very carefully with your broker before you sign it to make sure there aren’t any other situations in which your actions would void your physical damage coverage.
Be Sure To Read the Small Print
There are other factors you should be aware of in your physical damage coverage that might affect whether the insurance company has to pay out. There are several questions you should ask your broker, such as:
- If I have to temporarily replace my engine how does that affect my coverage?
- What is covered if a part fails and the subsequent accident causes other damage?
- Is your GPS unit or other upgraded features included in the policy? This becomes important if your plane is declared a total loss and determines whether you or the insurance company get to keep this equipment.
Learn more about aviation insurance and physical damage coverage or get started on a quote by visiting us at BWI Aviation Insurance. We’ve received top ratings from Investopedia as an aviation insurance broker focused on great customer service and helping you find the best rates.
Why shop for aircraft insurance with BWI Aviation Insurance?
Over our 42 year history, BWI has built longstanding relationships with all of the above Aviation Insurance Companies. We work hand in hand with the above companies and leverage our experience to find the best market for your particular airplane insurance risk.
To ensure that you are getting the absolute lowest rate and best coverage with a rock solid A+ rated Aviation Insurance company, get a quote with BWI today. We specialize only in Airplane Insurance and our office is open 12 hours a day. Our agents are friendly and knowledgeable, and most importantly they are agents that you can trust to get you the best coverage for your needs. Aviation Insurance is all that we do and have done for 42 years.
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